By THÉRÈSE MARGOLIS
When more than 4.7 million homes in the north of Mexico were left without light or heating on Monday, Feb. 15, President Andrés Manuel López Obrador (AMLO) was quick to resort to his favorite stock scapegoat for the subsequent humanitarian and economic repercussions: Blame it on past administrations.
True to form, rather than assuming responsibility for the disaster, which led to the deaths of at least 20 people along the U.S.-Mexico border and which stalled automotive and other manufacturing (one of the country’s most important industrial engines) as far south as Puebla, López Obrador instead seized the opportunity to justify his unwarranted, irrational and blatantly unconstitutional mandate to “reform” the nation’s electricity sector.
And, also true to form, AMLO and his team of yes-men didn’t hesitate even a minute in pointing the finger for the blackouts on his predecessor Enrique Peña Nieto’s Energy Reform.
But as much as AMLO would like to rebuff responsibility for the energy crisis onto past administrations, the facts clearly show that, at least in this case, the blame falls squarely on his shoulders and his backwater Fourth Transformation (4T), aimed at thrusting the nation two centuries back in time.
Even Mexico’s state-owned Federal Electricity Commission (CFE) Director Manuel Bartlett Díaz (an AMLO crony to the core) admitted that the root of the outages was a lack of natural gas reserves (used to produce electricity), which he, of course, echoed AMLO in blaming on the “corrupt administrations of the past.”
But as it turns out, it was AMLO’s administration, and not Peña Nieto’s, that was ultimately responsible for Mexico’s lack of gas reserves.
Since taking office in December 2018, López Obrador has put the skids on several projects planned and initiated by Peña Nieto that would have increased Mexico’s natural gas storage capability.
According to Rosanety Barrios, an independent Mexican energy specialist with more than 30 years of experience under her belt who last week spoke during a forum with the business news website El CEO about the blackouts, even though the shortage was provoked by a sudden cold spell in Texas that froze pipelines and stalled supply chain deliveries, it was Mexico’s lack of gas storage facilities that led to the electrical interruptions.
“Mexico has suffered from a series of self-inflicted problems,” she said, noting that in 2018 AMLO’s government rejected a five-year National Gas Control Center (Cenagas) program that would have dramatically increased the nation’s gas storage capacities.
The multifaceted Cenagas program, proposed by the Peña Nieto administration, included a series of projects that would have addressed Mexico’s gas storehouse issues, including a floating storage regasification unit in Pajaritos, Veracruz.
The government-run energy giant Petróleos Mexicanos (Pemex) had originally opened the bidding for construction of the unit to an international tender back in mid-2018 and was expected to announce the winner in February 2019, but upon taking office in December 2018, AMLO hastily put an end to the regasification enterprise, along with almost every public works project his predecessor had initiated.
Had the Pajaritos project been completely as planned, Mexico would have had additional daily storage capacity of 600 million cubic feet of gas by of the start of 2020, enough to head off this month’s electricity fiasco, according to a report in the daily Reforma newspaper.
Ah, but AMLO’s reverse-everything-my-predecessors-ever-accomplished policies did not stop there.
In May 2020, the president pulled the plug on yet another project aimed at upping the nation’s gas storage capacity, an underground storage facility that could have handled 10 billion cubic feet of gas in Veracruz, according to Reforma.
AMLO’s do-it-alone mantra has also prevented Mexico from broadening its portfolio of natural gas suppliers, prioritizing state-owned providers over private-sector companies, even when this has meant higher costs, less reliable sources, more environmental pollution and poorer quality, which is exactly what his soon-to-be-approved Electricity Reform Bill accomplished.
In the Feb. 17 edition of Americas Quarterly, former Mexican Senator, former Mexican Undersecretary of Foreign Relations (SRE) and current professor of practice at the London School of Economics (LSE) Vanessa Rubio rightly pointed out that AMLO is on a dangerous collision course with this “misguided and harmful” energy plan.
While López Obrador tried to use the blackouts to justify his myopic energy nationalization efforts, Rubio said, “a push to re-establish state control over energy markets will not produce the self-sufficiency he seeks.”
“It will instead deepen the country’s dependence on international inputs and pollutive energy sources, further hindering the efficiency of an already-strained domestic energy market operation,” she said.
“His administration should drop its ideological policy and recognize that the energy sector’s performance lies at the heart of the economy’s long-term competitiveness and productivity. It is diversification and not concentration that will make Mexico more competitive and less dependent in terms of energy.”
Rubio correctly underscored the fact that Mexico’s once-plentiful oil reserves are now approaching depletion and the country needs to look forward — not backwards, as AMLO would have it — toward cleaner, renewable energy sources, as was anticipated by Peña Nieto’s Energy Reform.
Rubio also found fault with AMLO’s much-hyped Electricity Reform Bill, warning that it would only lead to higher prices for consumers and less energy security for the country.
“The (AMLO) administration, rather than prioritizing ideology and electoral considerations over rule of law and the country’s economic and environmental health, should pause to consider the long-term consequences that lay ahead. Mexico’s development is at stake,” she said.
If AMLO does not soon reverse course in his cataclysmic energy plan, Mexico will indeed soon face a major energy shortage, not just a few rolling blackouts.